Written by Cláudio Afonso | LinkedIn | X
Auto stocks fell sharply Wednesday as investors braced for new tariffs on the sector, set to be announced by former President Donald Trump at a press conference scheduled for 4 p.m. Eastern time.
The White House press secretary, Karoline Leavitt, confirmed the timing of the announcement, which comes after Trump delayed some auto tariffs by one month on March 6.
Shares of Tesla dropped as much as 6.3% in morning trading, while Lucid Group fell 2.3% and Rivian declined 1.5%. Legacy automakers General Motors, Ford and Stellantis each lost more than 1.7%.
Trump has said the tariffs are aimed at boosting domestic production and encouraging automakers to shift more manufacturing to the U.S. However, the move risks disrupting integrated supply chains across North America.
Chinese EV makers also traded lower despite having limited exposure to U.S. tariffs for now. Nio slumped 4%, XPeng fell 2.3%, and Zeekr was down 1.7%.
Broader markets also turned lower, with the S&P 500 falling nearly 1% and the Nasdaq 100 dropping 1.7% to session lows.
Earlier this month, White House senior counselor for trade and manufacturing Peter Navarro warned about the risk of Chinese carmakers entering the U.S. market without tariff barriers.
Navarro argued that Chinese firms benefit from unfair advantages including what he called “massive government subsidies.” He also cited labor conditions and looser environmental rules in China as drivers of cost disparities with U.S. manufacturers.
Navarro sharply criticized China’s trade practices, arguing that unfair advantages allow Chinese automakers to dominate global markets where ‘massive government subsidies’ also had a role. He pointed to labor conditions and environmental regulations as key factors in the cost disparity between Chinese and U.S. manufacturers.
